Regulation No. 2011-01: Update I on the Professional Exercise of the Trustee Office in the Republic of San Marino

REGULATION FOR THE PROFESSIONAL EXERCISE
OF THE TRUSTEE OFFICE
IN THE REPUBLIC OF SAN MARINO
UPDATE NO. I year 2011 / number 01

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01
Article 1 – Amendments to Regulation No. 2010-01 regarding the professional exercise of the trustee office in the Republic of San Marino.
1. Article I.I.2, paragraph 1 is replaced as follows:
“1. For the purposes of this Regulation, the expressions used shall be understood with the following meaning:
1. “Register of Professional Trustees”: register containing the list of trustees authorized by the Central Bank of the Republic of San Marino to exercise the professional office of trustee;
2. “Central Bank”: the Central Bank of the Republic of San Marino regulated by Law 29 June 2005, no. 96 and subsequent amendments;
3. “Trustee Decree”: Delegated Decree 16 March 2010 no. 49 and subsequent amendments and integrations;
4. “BCSM Foundation”: the Central Bank of the Republic of San Marino Foundation registered in the public Register of Foundations no. 49 of 14/04/2005, with legal seat in San Marino at via del Voltone, 120.
5. “Applicant Financial Enterprises”: subjects identified in Article 2 paragraph 3, letter a), of Delegated Decree 16 March 2010, no. 49;
6. “Trust Law”: Law 1 March 2010 no.42 and subsequent amendments and integrations;
7. “Companies Law”: Law 23 February 2006 no.47 and subsequent amendments and integrations;
8. “Applicant Independent Professionals”: subjects identified in Article 2 paragraph 3, letter c), of Delegated Decree 16 March 2010 no. 49;
9. “Lisf”: Law 17 November 2005, no. 165 and subsequent amendments and integrations;
10. “Non-cooperative Countries or Territories”: countries, jurisdictions or territories for which the FATF or another FATF-Style Regional Body (including the Moneyval Committee of the Council of Europe) issues public statements or other measures (so-called “Countries, jurisdictions or territories subject to strict monitoring” as per Instruction no.2009-08 of the Financial Information Agency);
11. “Head of Trustee Office”: subject appointed within the company to perform the office of trustee and endowed with the related powers, including signature;
12. “Relevant Administrative Sanctions”: administrative sanctions imposed pursuant to one of the following regulations (and their subsequent amendments):

• Law 21 January 2010 no.6;
• Law 17 June 2008 no.92;
• Decree 30 May 2006 no.76;
  whose amount exceeds at least one of the following thresholds:
• per single sanction: euro 10,000.00 (ten thousand euros);
• on an annual overall and cumulative basis:
• euro 50,000.00 for legal persons and their corporate officers;
• euro 20,000.00 for independent professionals;
  13. “Specialized Fiduciary Companies”: fiduciary companies that exercise fiduciary activity in the specialized form as per Circular no. 2008-06;
  14. “Applicant Companies”: subjects identified in Article 2 paragraph 3, letter b), of Delegated Decree 16 March 2010, no. 49;

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01
15. “Applicant Subjects”: subjects identified in Article 2 paragraph 3, letters a), b) and c) of Delegated Decree 16 March 2010, no. 49;
16. “Beneficial Owner”: the natural person as defined in Article 1 paragraph 1 letter r) of Law 17 June 2008 no. 92;
17. “Professional Trustee”: subject who, pursuant to this Regulation, has obtained authorization from the Central Bank of the Republic of San Marino to carry out in the Republic of San Marino the office of trustee in a professional manner, or who is already authorized ex officio pursuant to Article 5 of Delegated Decree 16 March 2010 no. 49;
18. “Professional Trustee Office”: exercise in the Republic of San Marino of the office of trustee in more than one Trust.”
2. Article II.I.1 is replaced as follows:
“Article II.I.1 – Requirements
1. APPLICANT FINANCIAL ENTERPRISES, to obtain authorization for the PROFESSIONAL TRUSTEE OFFICE must:
a) have the legal form of a joint-stock company (S.p.A.); b) not have suffered, in the last 12 months, RELEVANT ADMINISTRATIVE SANCTIONS; c) comply with the provisions of prudential supervision in force in the sector of the APPLICANT FINANCIAL ENTERPRISE; d) appoint, by resolution of the Board of Directors, as HEAD OF TRUSTEE OFFICE a subject possessing the qualification referred to in the following Article IV.I.2, who is the legal representative, or another member of the Board of Directors, or the General Manager or an employee; e) have in the corporate object of their statutes the provision of “PROFESSIONAL TRUSTEE OFFICE, if authorized by the CENTRAL BANK”.
3. Article II.II.1 is replaced as follows:
“Article II.II.1 – Requirements
1. APPLICANT COMPANIES, to obtain authorization for the PROFESSIONAL TRUSTEE OFFICE must:
a) have the legal form of a joint-stock company (S.p.A.) or a limited liability company (S.r.l.); b) have their legal seat and administrative seat in the territory of the Republic of San Marino; c) have paid-up share capital not less than euro 100,000.00; d) have concluded an insurance policy guaranteeing third parties with a minimum limit of euro 1,000,000.00, the permanence of which is subject to a lien in favor of the CENTRAL BANK; e) not have suffered, in the last 12 months, RELEVANT ADMINISTRATIVE SANCTIONS; f) have shareholders, direct and indirect, directors and auditors possessing the same honorability requirements provided by the current supervisory provisions for corporate officers of banks:

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01 g) have the legal representative, or another member of the Board of Directors with operational delegation or the General Manager or an employee, who, as HEAD OF TRUSTEE OFFICE, possesses the professional requirements referred to in the following paragraph 2; h) be subject to accounting control and audit certification by an audit firm registered in the Register referred to in Article 7 of Law 27 October 2004, no. 146; i) have in the corporate object of their statutes the provision of “PROFESSIONAL TRUSTEE OFFICE, if authorized by the CENTRAL BANK”; l) have as shareholders or partners only natural persons and/or legal persons as indicated below:
1. companies, entities and foundations under San Marinese law;
2. trusts registered in the Trust Register pursuant to Delegated Decree 16 March 2010 no.50;
3. foreign legal persons for which none of the following circumstances apply:
3a) legal form of “anonymous company” or substantially such, i.e., suitable, under the legal system of the country where it has its seat, to guarantee confidentiality of its ownership structures; 3b) legal seat in NON-COOPERATIVE COUNTRIES OR TERRITORIES in the prevention and combating of money laundering and terrorist financing; 3c) ownership structures not transparent and/or adequate, i.e., characterized by the presence of other legal persons falling under one or more of the provisions in previous points 3a and 3b or by foreign fiduciary companies not falling into the category described in the following point 5;
4. fiduciary companies registered in the Register of Authorized Subjects pursuant to Article 11 of Lisf;
5. foreign fiduciary companies having their legal seat in Countries or Territories other than those included in the list in previous point 3b) and with which international agreements for the exchange of information via administrative channels are in force.
2. The professional requirements are as follows:
a) degree in legal or economic subjects; b) overall experience of duration not less than 3 years, acquired in the last decade, in professional activities related to asset management; c) participation in the qualifying training course referred to in the following Article IV.I.2 and successful completion of the final test.”
4. Article II.II.2 is replaced as follows:
“Article II.II.2 - Content of the Application
1. For APPLICANT COMPANIES, the application referred to in the previous article must be accompanied:
a) by an updated detailed list of all shareholders, complete, for those among them who are not natural persons, with the identification of their BENEFICIAL OWNERS; b) by the honorability certificates indicated in the following paragraph 2 for:

• all shareholders who are natural persons;

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01

• all directors and BENEFICIAL OWNERS of shareholders who are legal persons;
• all directors and auditors of the APPLICANT COMPANY;
  c) a copy of the insurance policy referred to in Article 2 paragraph 3 letter b) of the TRUSTEE DECREE; d) a certificate of validity of the company with updated content; e) a license certificate of the company with updated content; f) a copy of the updated deed of incorporation and statutes; g) a curriculum vitae signed by the subject possessing the professional requirements referred to in the second paragraph of the previous article, indicating their position on behalf of the APPLICANT COMPANY; h) the authenticated self-declaration referred to in Annex 2; i) a Technical Report describing with reference to the next two financial years:
• internal control system;
• procedures for archiving data and documents, both in paper and electronic format, and protection systems intended to be adopted to ensure their preservation and confidentiality;
• audit firm appointed or intended to be appointed to obtain authorization.
  2. The possession of honorability requirements is proven through:
  a) the production of the general criminal record certificate, the certificate of pending charges, the civil certificate or certificate of no bankruptcy, issued by the competent public offices of the place where the person has resided for the longest period in the last five years, respecting the criteria of “substantial equivalence” referred to in Article 1, paragraph 2 of the COMPANIES LAW; b) the production, regarding all remaining jurisdictions, of a self-declaration made by the interested subject before a San Marinese public Notary, using the model attached as Annex 4 to this Regulation.
  3. Certificates issued abroad, if not in Italian, must be accompanied by a sworn translation.
  4. To the certificates referred to in paragraph 2, in order to verify the territorial competence of the public authorities that issued them, a copy of a valid identity document is added.”
  5. Article II.III.1 is replaced as follows:
  “Article II.III.1 - Requirements
  1. APPLICANT INDEPENDENT PROFESSIONALS, to obtain authorization for the PROFESSIONAL TRUSTEE OFFICE must:
  a) have been registered for at least 2 years in the relevant Register; b) have concluded an insurance policy guaranteeing third parties with a minimum limit of euro 1,000,000.00, the permanence of which is subject to a lien in favor of the CENTRAL BANK; c) not have suffered, in the last 12 months:
• measures of interdiction and/or incapacity;

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01

• sanctions provided for by Law 20 February 1991 no. 28, with the exception of the “reprimand”;
• RELEVANT ADMINISTRATIVE SANCTIONS;
  d) possess the same honorability requirements provided by the current supervisory provisions for corporate officers of banks; e) have participated in the qualifying training course referred to in the following Article IV.I.2 and have successfully passed the final test.”

6. Article II.III.2 is replaced as follows:
   “Article II.III.2 - Content of the Application
   1. For APPLICANT INDEPENDENT PROFESSIONALS, the application referred to in the previous article must be accompanied:
   a) by a copy of the insurance policy referred to in Article 2 paragraph 3 letter c) of the TRUSTEE DECREE; b) by a certificate of registration in the Register of Lawyers and Notaries or of Chartered Accountants and Accounting Experts of the Republic of San Marino; c) by the honorability certificates indicated in the following paragraph 2; d) by the authenticated self-declaration referred to in Annex 3.
   2. The possession of honorability requirements is proven through:
   a) the production of the general criminal record certificate, the certificate of pending charges, the civil certificate or certificate of no bankruptcy, issued by the competent public offices of the place where the person has resided for the longest period in the last five years, respecting the criteria of “substantial equivalence” referred to in Article 1, paragraph 2 of the COMPANIES LAW; b) the production, regarding all remaining jurisdictions, of a self-declaration made by the interested subject before a San Marinese public Notary, using the model attached as Annex 4 to this Regulation.
   3. Certificates issued abroad, if not in Italian, must be accompanied by a sworn translation.
   4. To the certificates referred to in paragraph 2, in order to verify the territorial competence of the public authorities that issued them, a copy of a valid identity document is added.”
   7. After Article II.III.2, Article II.III.3 is inserted as follows:
   “Article II.III.3 – Extensive Effect of Training Requirements
   1. Independent professionals, who have already become PROFESSIONAL TRUSTEES on their own behalf, may extend the effects of the fulfillment of their training obligations also to the company of which they are serving directors, within the limit of a single appointment as HEAD OF TRUSTEE OFFICE.”
   8. Article III.I.2 is replaced as follows:
   “Article III.I.2 – Revocation of Authorization

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01
1. The CENTRAL BANK revokes the authorization for the PROFESSIONAL TRUSTEE OFFICE in the cases referred to in Article 2 paragraph 5 of the TRUSTEE DECREE, which are hereby recalled:
1. participation in the simulation of the trust, established by a final judgment;
2. failure to achieve the annual hours of professional training;
3. provision of advice regarding the constitutive act of a trust of which the office of trustee is subsequently assumed.
2. Pursuant to Article 2 paragraph 7 letter e) of the TRUSTEE DECREE, the CENTRAL BANK may also revoke the authorization in cases where the PROFESSIONAL TRUSTEE:
1. has obtained or retained the authorization to exercise the PROFESSIONAL TRUSTEE OFFICE by presenting false declarations/documents or resorting to other irregularities;
2. does not comply, in a repeated manner, with the payment of the annual fee for maintaining registration in the Trust Register that they administer;
3. does not comply with the obligations provided in the following Articles III.II.1 and III.II.2;
4. loses the requirements required to obtain the authorization to exercise the PROFESSIONAL TRUSTEE OFFICE.
3. The revocation of the authorization entails the immediate deletion of the PROFESSIONAL TRUSTEE from the REGISTER OF PROFESSIONAL TRUSTEES.
4. Pursuant to what provided in the previous paragraph 2, point 4, the CENTRAL BANK may proceed to the revocation of the authorization referred to in Article 5 of the TRUSTEE DECREE, against those PROFESSIONAL TRUSTEES who on the date of 31 December 2010, coinciding with the deadline referred to in Article 64 paragraph 2 of the TRUST LAW, do not possess the requirements referred to in Article II.I.1, paragraph 1, letters a), b), c), and e).”
9. Article III.I.3, paragraph 1 is replaced as follows:
“1. With reference to the hypotheses referred to in points 3 and 4, of paragraph 2, of the previous article, the CENTRAL BANK may subordinate the application of the revocation measure to the failure by the PROFESSIONAL TRUSTEE to remove the aforementioned causes within a certain time limit, ranging from 1 to 6 months.”
10. Article III.I.4, paragraph 2 is replaced as follows:
“2. The PROFESSIONAL TRUSTEE within 60 days from the sending of the communication referred to in the previous paragraph may present their counter-arguments.”
11. Article III.II.1 is replaced as follows:
“Article III.II.1 – Periodic Obligations

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01
1. The PROFESSIONAL TRUSTEE, by 31 January of each year and with reference to the previous calendar year, must transmit again to the CENTRAL BANK the updated documents and certificates referred to in the previous articles:

• II.I.2 letters a) and b), for financial enterprises;
• II.II.2 paragraph 1 letters a), b), c) d), e), h) for limited liability companies;
• II.III.2 paragraph 1 for independent professionals.
  2. The PROFESSIONAL TRUSTEE, together with the documentation referred to in the previous paragraph, must transmit to the CENTRAL BANK:
• copy of the certificate of participation in the training course for updating, carried out in the previous calendar year, of the following Article IV.I.3, paragraph 5;
• Analytical Inventory of Assets for each trust administered, valued at the date of the end of the previous calendar year according to the criteria and schemes of the model that will be adopted by a measure of the CENTRAL BANK and made available on the website www.bcsm.sm.”
  12. Part IV is replaced as follows:
  “PART IV
  TRAINING OBLIGATIONS
  Title I
  Training Courses
  Article IV.I.1 – Organizational Aspects
  1. Pursuant to Article 2 paragraph 7 letter f) of the TRUSTEE DECREE, the BCSM Foundation periodically organizes training courses on trust matters, open to anyone interested in the subject, regardless of the immediate or future purpose of obtaining the authorization referred to in this Regulation, which presupposes the constant fulfillment of training obligations on an annual basis.
  2. APPLICANT SUBJECTS and PROFESSIONAL TRUSTEES in order, respectively, to obtain or maintain, the authorization for the PROFESSIONAL TRUSTEE OFFICE, must fulfill the training obligations referred to in this Part.
  Article IV.I.2 – Qualifying Training Courses
  1. In order to obtain authorization for the PROFESSIONAL TRUSTEE OFFICE, directly the APPLICANT INDEPENDENT PROFESSIONALS or, in the case of APPLICANT FINANCIAL ENTERPRISES or APPLICANT COMPANIES, their HEAD OF TRUSTEE OFFICE, must participate in the qualifying training courses and pass the final written test, subject to what provided in the previous Article II.III.3.

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01
2. SPECIALIZED FIDUCIARY COMPANIES, active in the fiduciary sector for at least three years, are exempt from the obligation referred to in the previous paragraph, subject to the training obligation referred to in the following Article IV.I.3
3. APPLICANT FINANCIAL ENTERPRISES and APPLICANT COMPANIES, subject to the obligation referred to in paragraph 1, also to preserve the authorization received and to appropriately identify substitute figures for the HEAD OF TRUSTEE OFFICE may request participation in the qualifying training courses also for other subjects, provided they are their employees or directors.
4. Qualifying training courses are organized on condition that there are requests for qualification and, normally, in conjunction with those referred to in the following article.
5. At the end of the qualifying training course, the BCSM Foundation will communicate in writing to all participants the outcome of the written test and, if positive, will inform, limited to APPLICANT SUBJECTS, the Supervision Department of the CENTRAL BANK, for what concerns the issuance of the authorization.
Article IV.I.3 – Updating Training Courses

1. In order to maintain the authorization, PROFESSIONAL TRUSTEES have the burden to ensure that they or their HEAD OF TRUSTEE OFFICE participate, at least once for each calendar year following the year of qualification, in the mandatory updating training courses, subject to what provided in the previous Article II.III.3.
2. For PROFESSIONAL TRUSTEES authorized ex officio pursuant to Article 5 of the TRUSTEE DECREE, in the absence of a qualifying training course, the mandatory annual updating training course must be attended by the HEAD OF TRUSTEE OFFICE appointed by the Board of Directors, whether it is the legal representative of the financial enterprise, or an administrator with specific operational delegation, or the General Manager, or an employee, with obligation starting from the calendar year of entry into force of the aforementioned provision (2010).
3. Updating training courses are organized at least semi-annually and, if a final test is provided for the purpose of verifying the level of effectiveness of the training initiative in general, the results of the test of each participant will remain strictly confidential and communicated, upon request, only to their respective PROFESSIONAL TRUSTEES.
4. PROFESSIONAL TRUSTEES, subject to the obligation referred to in the first two paragraphs, also to preserve the authorization received by having substitute figures for the HEAD OF TRUSTEE OFFICE possibly already identified pursuant to art. IV.I.2 paragraph 3, may request participation in the updating training courses also for other subjects, provided they are their employees or directors.

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01
5. At the end of each updating training course, the BCSM Foundation will issue a certificate of participation to all participants.”
13. At Article V.I.3, paragraph 1, letter e) is deleted.
14. Annexes 1), 2) and 3) are replaced by Annexes 1), 2), 3) and 4) of this Regulation.
Article 2 – Entry into force.
1. This regulation enters into force on 28 April 2011.
Article 3 – Consolidated text of Regulation No. 2010-01.
1. The text of Regulation No. 2010-01 consolidated with the amendments introduced by this Regulation will be made available on the website of the Central Bank of the Republic of San Marino (www.bcsm.sm).

Central Bank of the Republic of San Marino
Regulation No. 2011-01: Update I of Regulation No. 2010-01
ANNEX 1
SELF-DECLARATION OF REQUIREMENTS FOR THE PROFESSIONAL EXERCISE OF THE TRUSTEE OFFICE BY FINANCIAL ENTERPRISES The joint-stock company ____________________________________, registered in N in the Register of Authorized Subjects, as per Article 11 of Law 17 November 2005 no.165, in the person of its legal representative _________________________________, born in _______________________________ on _____________ and residing at _________________________________________ in ________